IDEAS home Printed from https://ideas.repec.org/a/taf/rjerxx/v28y2006i2p105-130.html
   My bibliography  Save this article

Reforming Housing Finance: Perspectives from Denmark

Author

Listed:
  • Mikkel Svenstrup
  • Søren Willemann

Abstract

This paper investigates the effect of adding a distinct feature of the Danish mortgage market to the market in the United States. This feature, a buyback option, enables mortgagors to buy back their share of the mortgage-backed security at market price. Extending a standard referenced pricing model, the findings indicate that the introduction of the buyback option reduces the credit spread required by the financial intermediary by 23%, potentially reducing the contingent liability of the U.S. government. Furthermore, the buyback option protects households against the risk of being locked in after an increase in interest rates. This could be of particular benefit to low-to-middle income households.This paper received the award for the best paper on Real Estate Finance (sponsored by the Fannie Mae Foundation) presented at the 2004 ARES Annual Meeting.

Suggested Citation

  • Mikkel Svenstrup & Søren Willemann, 2006. "Reforming Housing Finance: Perspectives from Denmark," Journal of Real Estate Research, Taylor & Francis Journals, vol. 28(2), pages 105-130, January.
    • Handle: RePEc:taf:rjerxx:v:28:y:2006:i:2:p:105-130
    DOI: 10.1080/10835547.2006.12091175
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/10835547.2006.12091175
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/10835547.2006.12091175?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:rjerxx:v:28:y:2006:i:2:p:105-130. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/rjer20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.